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Europe to recover in third quarter

Europe to recover in third quarter article image
The European Commission is confident that the European Union economy will recover from recession in the third quarter. However, it has warned that recovery will be weak and heavily affected by unemployment and restricted by government coffers. Joaquin Almunia, commissioner for Economic and Monetary Affairs, said a buoyant global economy meant "the drop is behind us" but added that growth was largely based on stimulus measures. "The situation has improved mainly due to the unprecedented amounts of money pumped into the economy by central banks and public authorities," he noted, but warned: "The full impact of the crisis on labour markets and public finance is still to come, and the correction in housing markets continues to hold back construction investment in several countries." Political leaders will face tough decisions as to whether they should keep their respective stimulus measures, and withdrawal of government support will be difficult while balancing deficits, he said. The commission has forecast 0.2 percent growth in the September quarter, followed by 0.1 percent in the final quarter for the 16-nation eurozone and the broader 27-member EU.

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